End. 145-1/96
Form 005
Page 2

7. Notwithstanding paragraph 3 above, if under the Old Policy the Inception Date as respects any layer of coverage, Insured or otherwise was later than the Inception Date stated in the Declarations of the New Policy, then the Inception Date under the New Policy as respects such layer of coverage, such Insured or such other subject of coverage shall be the same as such Inception Date under the Old Policy; without limiting the foregoing, if:

a. before the Effective Date, any Executive Officer of any Insured had knowledge or notice that (i) an event or exposure to conditions had commenced, or (ii) Personal Injury or Property Damage caused by use of the Insured's Products had taken place in whole or in part, whether or not such person was aware that such Occurrence was likely to involve the New Policy, and

b. the Old Policy would not have covered such Occurrence if notice thereof would have been given to the Insurer immediately prior to the Effective Date,

then the New Policy shall not afford any coverage with respect thereto.

8. If (a) the Effective Date is not the commencement of an Annual Period, and (b) the Insurer is first sent notices of different occurrences/Occurrences within the same Annual Period both before and after the Effective Date, then, subject to all other limitations, terms, exclusions and conditions of the Policy, each such occurrence/Occurrence shall be subject to the per occurrence limit, aggregate limit and per occurrence/Occurrence retention amount listed in Items 2(a) and (b) of the Declarations as in effect at the time notice of such Occurrence was first given to the Insurer; provided, however, that the aggregate limit of liability stated in Item 2(b) of the Declarations shall apply with respect to the entire Annual Period, and if such limit is increased or decreased, by this endorsement, the aggregate limits within the Annual Period shall not be cumulative and the lower limit shall be included within the higher limit, i.e., the occurrences/Occurrences of which notice was first given during the portion of the period in which the lower limit was in effect shall be subject to such limit, and additionally all occurrences/Occurrences of which notice was first given during the entire annual period shall be subject to the higher limit.

**Named Insured** **Policy No.** **Form Reference**

New Policy: INTERNATIONAL BUSINESS MACHINES CORPORATION IBM-5103/5 005 - 3/96

Old Policy : INTERNATIONAL BUSINESS MACHINES CORPORATION IBM-5103/4 004 - 11/91

Nothing herein contained shall be held to vary, alter, waive or extend any of the terms, conditions, exclusions or limitations of the Policy referenced below, except as expressly stated herein.

The effective date of this endorsement is 21st May, 1997
All other terms and conditions remain unchanged.
This endorsement is attached to and made a part of Policy No. IBM-5103/5
of A.C.E. INSURANCE COMPANY, LTD.

Issued to: INTERNATIONAL BUSINESS MACHINES CORPORATION
Date of Issue: 26th September, 1997
By
Authorized Representative
End No. 1